EBS/FXMarketSpace rivalry heats up

Speaking at a panel on how the foreign exchange market structure is likely to develop over the next two to five years, James Sinclair, head of research and strategy at spot broker EBS, pointed to perceived drawbacks of the FXMarketSpace model.

He said: "[FXMarketSpace] works better for anyone who sits in the Chicago data centre as they see that price first and can react to it first. You are either in Chicago or behind Chicago. If you are going to have a global model, you need to have global support."

Roger Hawes, head of FX spot trading at the Royal Bank of Scotland, said the bank would leave a platform where it felt it was being disadvantaged. "If someone in Chicago gets price information before me and uses it to disadvantage me, I will move off that platform." As such, he said, there would be no advantage for FXMarketSpace to have its business operate in this way.

Harpal Sandhu, chief executive at Integral, added that as a bank-owned platform, EBS had a fiduciary duty to create an orderly market-place. "It is almost like a centrally controlled economy that supports those that are disadvantaged," he said. "Whereas what FXMarketSpace is doing is to make one set of rules that are not going to advantage or disadvantage anyone, we're going to make it completely transparent and extremely open to market participants. Then it's up to the participants to figure out ways to manage themselves."

Sandhu added: "In the end, competition is a beautiful thing, as it allows all market participants to continually make choices about where they are getting the best execution for themselves."